List of Low Float (Small Equity Size) Companies in Indian Stock Market

Low float Shares or Small Equity Size companies can be a blessing for Long term Investors. Understand what it is & how to identify one

What is a Low Float Stock or Small Equity Size Stock? 

A low float stock is a company with a low number of shares in public circulation i.e small number of shares available for trading. This is often seen as a positive because it means that the price of these stocks can experience a quick up move because there is not much supply to meet the demand.

There are few important points and misconceptions to clear when it comes to low float or low equity size companies:

1. Some people refer to these as ‘Low Float’ while others refer to them as ‘Small Equity Size’ companies and some refer to these as ‘low liquidity’ stocks, well the technical definition can vary a bit but in a larger context these are all the same things. Logically, a company with less shares available to trade will of course have low liquidity.
   
   
2. One of the misconceptions is that low float companies are small cap companies – Nope, not necessarily all small equity size / low float companies are small cap companies. A large cap or mid cap company can also have a low float. Example: Shree Cement, MRF. These aren’t small cap companies and yet they have relatively very less number of shares available to trade publicly / these are low float companies / small equity size companies.
   
   
3. Another misconception is that small equity size companies  are fundamentally weak companies and should be avoided. The quality of a company has nothing to do with the number of shares available to trade in the market. Two completely unrelated points There are more than 4,500 companies listed on the India stock exchange. And you would find that, there are great quality companies with larger float / equity size and there are also poor quality companies with larger float / equity size. Similarly there are quality companies with smaller float / equity size and also poor quality companies with smaller equity size.

If so, why should one invest in a Small Equity size company? Is there an advantage?

Yes, there is. If someone is a Long term investor then identifying a good quality company with low equity size can be a huge advantage for them. It may yield greater returns in relatively less time.

Since the availability of shares is low in case of a small equity size company, the stock prices can go upwards very quickly as soon as there is positive news about the company. It is also seen that the rallies in the low float stocks can be more news-driven. A good example is Ruchi Soya x Patanjali. Ruchi Soya had relatively lesser shares floating in the open market (low liquidity), and as there were news of Pantanji acquiring Ruchi Soya, the stock saw upper circuit day in day out. And that gave unprecedentedly high returns to investors of Ruchi Soya.

Ultimately the share market runs on demand-supply and so is the price of any given stock. The advantage that a small equity size company has is that when their fundamentals are seen improving, it comes in the radar of big daddies like FIIs and DIIs or even HNIs, once these big investors start investing in it, the visibility of the company further increases, and as more investors attempt to buy the shares of such low float companies, then there’s sudden rise in stock prices for small equity / low float companies, much sharper than those seen in large-equity size stocks or companies with high float. Basically, if the fundamentals are great for any company and the growth potential is visible along with the expanding market size, the low float should be a blessing for the early investor.

So, Size does Matter. How to identify a good quality company with low float (small equity size)?

You can do that as well, just look within the NSE 500 or 750 companies – divide the market cap of a company by its current price. You will find the result is in lakhs and crores. That’s the equity size. Lesser is Better. But that’s not enough, what’s important is to identify the stock in its early growth stage and this may require an insightful understanding of their business, and their business growth potentials. 

This is not an easy job and often retail investors like you and me would either miss the rally because we can’t identify a good quality stock with low float in time or if we do, we miss-read the quality aspect of it. So we are defeated by either time or by quality. And hence it’s better to lean on to professionals. Someone who is great at business analysis and lives breathes fundamentals to bring food on his tables. I would suggest hiring a Finance Advisor. In my experience, finding a good finance advisor is a tough job, as there are all sorts of people with shallow knowledge who know how to talk and label themselves as a finance advisor. You need someone who has geeky qualities and has a good track record. I happened to find my advisor. The best and most assuring way for me to invest my money in the equity market is based on Manoj’s advice. For relatively fast, reliable, profound and detailed advisory, you may reach out to him if you like – Manoj Rajgopal. Here’s his YouTube and his Website.

Or if you can’t afford the Financial Advisor, then I would recommend you making your list of companies that you identify as good quality with relatively smaller equity size and then ask Sumit Mehrotra for his view on it. You can ask him the questions during the ‘Market Ka Panchnama’ show which he runs after 3.30pm every weekday. He is less likely to entertain a big list in one go. So cover your list one after another. Ask about 1 stock a day. Based on his views you will get clarity and slowly you will trim down your list and will be left with potentially the good ones. It’s a long exercise, but that’s the best you can get for free. Here’s his Twitter. Questions have to go through the CNBC Awaaz FB page (look for live videos at 3.30pm). He speaks quite candidly on the show which is good to hear. In fact, I got the idea of writing this post after hearing about ‘small equity size company’ as a factor from his videos.

If you want the entire list of NSE 500 stocks sorted by Smallest Equity first, along with EPS and Market Cap information then you can 👉🏼 download it from here 👈🏼. Below is the list of top 50 from the list of NSE 500.

Name	Equity Size (in Crore)	Size by Market Cap
MRF Ltd	0.46	Mid Cap
Honeywell Automation India Ltd	0.92	Mid Cap
Lakshmi Machine Works Ltd	1.05	Small Cap
Page Industries Ltd	1.12	Large Cap
3M India Ltd	1.13	Mid Cap
Cera Sanitaryware Ltd	1.30	Small Cap
HLE Glascoat Ltd	1.38	Small Cap
Venky’s (India) Ltd	1.43	Small Cap
Procter & Gamble Health Ltd	1.66	Small Cap
TeamLease Services Ltd	1.77	Small Cap
V-mart Retail Ltd	1.98	Small Cap
ZF Commercial Vehicle Control Systems India Ltd	1.99	Mid Cap
Garware Technical Fibres Ltd	2.07	Small Cap
Abbott India Ltd	2.17	Mid Cap
Sanofi India Ltd	2.30	Small Cap
Blue Dart Express Ltd	2.40	Mid Cap
Astrazeneca Pharma India Ltd	2.56	Small Cap
Lux Industries Ltd	3.02	Small Cap
Bosch Ltd	3.02	Large Cap
Mastek Ltd	3.04	Small Cap
Atul Ltd	3.06	Mid Cap
Fine Organic Industries Ltd	3.06	Mid Cap
Polyplex Corp Ltd	3.14	Small Cap
MTAR Technologies Ltd	3.15	Small Cap
Indiamart Intermesh Ltd	3.18	Small Cap
Procter & Gamble Hygiene and Health Care Ltd	3.32	Mid Cap
Balaji Amines Ltd	3.39	Small Cap
Eclerx Services Ltd	3.40	Small Cap
Amber Enterprises India Ltd	3.48	Small Cap
Shree Cement Ltd	3.58	Large Cap
Galaxy Surfactants Ltd	3.58	Small Cap
Solara Active Pharma Sciences Ltd	3.80	Small Cap
TCI Express Ltd	3.85	Small Cap
HEG Ltd	3.90	Small Cap
Privi Speciality Chemicals Ltd	3.93	Small Cap
IFB Industries Ltd	4.28	Small Cap
Hitachi Energy India Ltd	4.29	Small Cap
Tata Steel Long Products Ltd	4.29	Small Cap
Hinduja Global Solutions Ltd	4.30	Small Cap
GMM Pfaudler Ltd	4.50	Small Cap
BASF India Ltd	4.57	Small Cap
Pfizer Ltd	4.57	Mid Cap
Indigo Paints Ltd	4.70	Small Cap
Bayer Cropscience Ltd	4.79	Mid Cap
CEAT Ltd	4.85	Small Cap
Sheela Foam Ltd	4.89	Small Cap
Tata Investment Corporation Ltd	4.92	Small Cap
SKF India Ltd	4.94	Mid Cap
Computer Age Management Services Ltd	5.00	Small Cap
Navin Fluorine International Ltd	5.15	Mid Cap

Some of the other common traits of companies with low free float is that their shares are not available cheap. The price of 1 unit of share is in thousands, Bosch, Page Industries, Abbott India are some classic examples. Also Usually the EPS is big. Of course, given there are less shareholders so the earnings will be higher per share. But remember Fire definitely = Hot. But Hot doesn’t necessarily mean Fire. Hot can also be a Girl or a Weather or Food or Water. Same ways, Low Float or Equity Size = High EPS and High Price. But High EPS and High Price doesn’t necessarily mean Low float or equity size company.

Hope the above list helped. But please don’t take any of this as a buying advice. Please do your own due diligence before investing. I am not an expert. I am merely an evolving learner and sharing here my learnings with the intent to help newcomers.

Last Updated: September 2022